Oil & Gas in Southwest Florida

The evening began with an introductory presentation by Nicole Johnson, Director of Environmental Policy at the Conservancy, including a brief history of the oil and gas (mainly oil) industry in Southwest Florida. Oil wells have existed in Southwest Florida since the 1940s, but the industry has not thrived here like it has in other areas, such as the western United States.

The Collier Controversy

The Conservancy played a prominent role in recent controversies involving “alternate extraction” techniques in Collier County in 2013 and 2015. These controversies arose from use of fracking and unconventional extraction techniques at the Hogan Well in eastern Collier County, and resulted in increased public awareness of potential environmental concerns relating to fracking. The Conservancy has identified banning alternate extraction techniques as their #1 priority during the 2018 legislative session.

2018 Bills: H.B. 237/S.B. 462

The Conservancy is encouraging support of Florida H.B. 237, and its companion S.B. 462. If enacted in their present form, all forms of “advanced well stimulation treatment” (including fracking) would be prohibited in Florida.

On November 9th, S.B. 834 was introduced, and would impose penalties of $50,000 per incident on anyone who approves or engages in “extreme well stimulation” (including fracking).

Presentation by Dr. Tony Ingraffea

Dr. Ingraffea is an accomplished scientist who has studied and written about the subject for many years. He presented statistics on Florida’s historical oil and gas production relative to other states; use of solar power in the Sunshine State; and information about methane and CO2 (greenhouse gas) releases from oil and gas operations. Dr. Ingraffea also provided information on countries, states, provinces, and cities and counties that have banned fracking, including:

In Florida, 40 counties (of 67) and 52 cities have either banned fracking outright, or have passed resolutions opposing it. Collier County has not taken any formal action.

Florida’s oil production peaked in 1978, when production reached 4 million barrels/month.

Today there are around 60 producing oil and gas wells in Florida, and they produce around 150,000 barrels/month.

Every day, the United States consumes around 20 million barrels/day.

Dr. Ingraffea alluded to the United States’ plan to withdraw from the Paris Agreement in his discussion of greenhouse gas emissions, and provided some alarming statistics and projections.

Dr. Ingraffea concluded with a picture of Southwest Florida completely submerged, and he cautioned that Southwest Florida could be under water by 2022 (in five years), if the greenhouse gases and methane from oil and gas production remain on their present course. Amid gasps (and some giggles) from the crowd, he emphasized “these are only projections.”

Takings/Bert Harris Act

The arguments for conservation are compelling and sincere. However, regulation of resources involves striking a balance among competing interest holders. Because of this, in banning extraction techniques, the legislature would be wise to consider potential impacts to mineral rights holders. Failure to do so could lead to takings and Bert Harris Act lawsuits, and the possibility of indeterminable, potentially enormous, liability exposure for state and local governments in Florida.

If you have any questions regarding fracking or land use in Southwest Florida, please feel free to contact me at jeff.wright@henlaw.com or by phone at 239-344-1371.

Over the past several years, hydraulic fracturing (or “fracking”) has become a very divisive environmental and political issue in many areas of the country. As our society’s desire for cleaner energy has become more of a priority, lawmakers and agencies at federal, state, and local levels have been confronted with determining whether and to what extent the use of hydraulic fracturing methods should be regulated, and whether such activities pose a potential threat to our drinking water sources.

What is Fracking?

Developed in the 1940’s, hydraulic fracturing is a method to extract conventional oil and gas resources found in permeable sandstone and carbonate reservoirs by drilling vertically into rock formations and injecting fluids under high pressures.

As 2016 closes, we reached out to our team and asked them to share some of the most notable issues in real estate and land use & environmental law:

Residential Closing Best Practices Requirements by Amanda Barritt

2016 saw the CFPB regulations and Best Practices requirements move into high gear with respect to financed residential closings. Lenders, attorneys, and title companies have invested a lot of time and money coming into compliance. However, the results of the national election, along with the ruling in the case, PHH Corporation v. CFPB, are causing these players to question whether any, or all, of the CFPB lending regulations will be done away with. For now, Melissa Murphy, Senior Vice President and General Counsel of the Attorney’s Title Fund, suggests slowing down on making significant investments in Best Practices, while continuing to make sure to comply carefully with RESPA, Section 8(c) requirements as to affiliated business arrangements until we see what happens in 2017.

Condo & HOA: Fire Sprinkler Retrofitting by Molly Maggiano

As the year winds down to an end, the opportunity for condominium associations to opt-out of fire sprinkler retrofitting is also coming to a close. The subject of fire sprinkler retrofitting proved to be a hot topic during the course of the year, due in part to communications put out by the Florida Division of Condominiums regarding the applicability of the obligation to retrofit, which left many associations who thought they were exempt confused as to whether they were subject to retrofitting, whether they should conduct an opt-out vote, and the implications of such a vote. This resulted in an abundance of frantic calls to association attorneys who were also dismayed and left to wonder whether the Division would clarify its statement. Thankfully, the Division did correct its communications, but the ordeal emphasized the importance and benefits of having a qualified association attorney on hand in crucial situations such as this.

2016 Significant Foreclosure Decisions by Shannon Puopolo

Foreclosure filings continued to decline in 2016. Notwithstanding, some significant foreclosure decisions came out this year. Below is my “Top 3” List:

The Florida Supreme Court affirmed the decision of the Fifth District Court of Appeal in Bartram v. U.S. Bank, N.A., holding that where an initial foreclosure lawsuit is dismissed by the court, such dismissal does not trigger the application of the 5-year statute of limitations, which would otherwise preclude a lender from filing a second action. Rather, the court held the lender is only prevented from suing on installment payments that are more than 5 years old.

The Eleventh Circuit Court of Appeals held in Failla v. Citibank, N.A. that where debtors file a statement of intent to surrender their residence in Chapter 7 bankruptcy, they must also waive any defenses or counterclaims raised in a pending state court foreclosure action.

The Fourth District Court of Appeal held in Ober v. Town of Lauderdale-by-the-Sea that the lis pendens statute does not discharge liens that are recorded and based on conduct which occurs after the date of the final judgment of foreclosure, even if such liens attach to the real property prior to the date of the foreclosure sale.

Land Use Law by Austin Turner

It was an exciting year for land use and environmental law at both a state and local level. On January 21st, CS/CS/SB 552 was enacted to comprehensively address issues such as Everglades restoration. In response to threats like the Lake Okeechobee algae blooms and the Zika virus, the Governor declared several States of Emergency which led to permit extensions. Recently, a supermajority of Florida voters approved one of the two renewable energy measures establishing a constitutional ad valorem tax exemption for solar power. Locally, Lee County residents approved a non-binding referendum for Lee County’s land acquisition and stewardship program, “Conservation 20/20.”

On behalf of the Real Estate and Land Use team at Henderson Franklin, we wish you and yours a very Happy Holiday season and New Year. Please enjoy our 2016 e-card benefitting the Golisano Children’s Hospital of Southwest Florida:

For those unfamiliar with the program and its history, the Lee County (the “County”) Conservation 20/20 program functions as the County’s environmental acquisition and management program that was established to protect our local drinking water, provide nature-based recreational opportunities, protect areas from flooding and provide wildlife habitat.

The Conservation 20/20 program was originally created on July 31, 1996, when the Board of County Commission (the “BOCC”) adopted Ordinance No. 96-12, which created a “Land Committee” to assist in implementing the “Lee County Conservation Land Acquisition and Stewardship Program.” Thereafter, the 20/20 program was substantially amended by Ordinance No’s 96-12, 05-17, and 13-09. Ordinance No. 15-08 was the most recent amendment, which establishes a 15 member appointed citizen’s advisory committee called the “Conservation Lands Acquisition and Stewardship Committee” (CLASAC). CLASAC is tasked with the responsibility of advising the BOCC regarding the acquisition, restoration, improvement and management of conservation lands to meet its enumerated objectives and duties.

It is important to emphasize that, following the adoption of Ordinance No. 15-08, any changes to the County’s 20/20 program must be approved by a “super-majority” vote of the entire BOCC.

Following two recent incidents, a new emergency rule has been enacted in Florida to ensure that the public, local governments and the Department of Environmental Protection (“DEP”) are notified by all responsible parties following a pollution incident.

Background

On August 28, 2016, Mosaic Fertilizer (“Mosaic”) notified DEP of suspected damage to a gypsum stack liner located at its New Wales Concentrate Plant, which ultimately created a sinkhole that released processed water into the underlying groundwater. While DEP responded to the site within 24 hours to assess potential response actions, the public did not learn of the issue until three weeks later. Also, although DEP reports indicated that no contamination had migrated off-site and therefore no public notification was required under the applicable Florida regulations, many residents remained concerned about the mere possibility of off-site contamination and the timeliness of Mosaic’s public notice.

Thereafter, on September 7, 2016, unauthorized discharges of domestic wastewater were released into Tampa Bay by facilities operated by the City of St. Petersburg, in Pinellas County. Similar to the Mosaic sinkhole, the public and environmental stakeholders expressed concerns about the accuracy and timeliness of information provided to the public by City officials.

On October 3, 2016, in response to a five-day forecast from the National Hurricane Center for Hurricane Matthew, a major storm which is expected to impact large portions of the east coast, the Governor issued Executive Order Number 16-230 declaring a 60 day State of Emergency throughout every Florida county.

Legal Authority for State of Emergency Permit Extensions

As I have explained in recent blog posts, Section 252.363, Florida Statutes, provides that certain qualifying permitees are entitled to extensions following a declared State of Emergency for the amount of time the declaration was in effect, plus an additional six (6) months. In order to obtain such an extension under this statute, permitees are required to submit a written notification to the appropriate authorizing agency (i.e., City, County, Florida Department of Environmental Protection (FDEP), or Water Management District) within 90 days after the State of Emergency has expired.

This year, on two separate election days, Florida voters had — and will have — the opportunity to vote on two different constitutional amendments.

(Editor’s Note: At press time, the August 30th primary had yet to occur. However, it has since been reported that Amendment 4 was approved by nearly 73 percent of Florida voters at the primary, thus the measure will take effect on January 1, 2018, and expire on December 31, 2037.)

Amendment 4: Florida Tax Exemptions for Renewable Energy Measure

By way of background, the Florida Constitution currently provides for local government ad valorem taxes on real property and tangible personal property, assessment of property for tax purposes, and exemptions to these taxes. Section 4(i) in Article VII of the Florida Constitution also provides that the legislature may prohibit the consideration of the installation of a renewable energy source device in the determination of the assessed value of real property used for residential purposes.

On July 26, 2016, by a sharply divided 3-2 vote, the Florida Environmental Regulation Commission (“ERC”) approved new changes to Florida’s surface water standards.

What is the ERC?

The ERC is a seven-member board (with two seats currently vacant) that is tasked with setting the standards and rules for Florida Department of Environmental Protection (FDEP) relating to air pollution, water quality, and waste management.

Incremental increases in statutory civil penalty amounts for statutes administered by the Environmental Protection Agency (EPA) have typically occurred. Dating back to 1990, federal agencies have long been required to issue regulations to adjust their statutory civil penalties to reflect inflation, maintain the deterrent effect of statutory civil penalties, and promote compliance with the law.

Accordingly, for the first time, this year’s adjustments to federal statutory civil penalties were calculated using a revised set of criteria under the 2015 amendments to the Federal Civil Penalties Inflation Adjustment Act (the “2015 Act”). Under the 2015 Act, federal agencies are required to adjust the level of statutory civil penalties with an initial “catch-up” adjustment through an interim final rulemaking and, starting on January 15, 2017, make subsequent annual adjustments for inflation. Thus, once a federal agency such as EPA has enacted the one-time catch-up rule, each statutory civil penalty amount will be adjusted every year (rather than every four years) to reflect the inflation that has thereafter accrued. However, there is a cap within the 2015 Act, under which the maximum amount of any initial catch-up increase cannot exceed 150 percent of the level that was in effect on November 2, 2015.

Executive Order 16-155

On June 29, 2016, the Governor issued Executive Order Number 16-155, declaring a State of Emergency throughout Martin and St. Lucie Counties due to the increased number of algae blooms from the Lake Okeechobee discharges. In this Executive Order, the Governor states:

[t]he Obama Administration unreasonably failed to budget for adequate maintenance and speedy rehabilitation of the Herbert Hoover Dike, resulting in frequent discharges of harmful water from Lake Okeechobee to the St. Lucie and Caloosahatchee Rivers and estuaries.”

The Governor explained that the release of these waters has caused an increase in algae blooms that have been dominated by Mycrosystis, an algae that can produce harmful toxins.

Executive Order 16-156

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About this Blog

Since 1924, the real estate and land use attorneys at Henderson Franklin have offered our clients guidance in matters of transactional real estate and development, community association law, real estate litigation, eminent domain, land use and environmental law.

ABOUT THE REAL ESTATE PRACTICE

Since 1924, the real estate and land use attorneys at Henderson Franklin have offered our clients guidance in matters of transactional real estate and development, community association law, real estate litigation, eminent domain, land use and environmental law.

About the Land Use Practice

Attorneys in this practice area represent both private and public interests in matters of land use and environmental law, permitting, zoning, litigation and related legal matters.Read More